How Virgin Money is developing digital tools for the modern banking age

Digital disruption is impacting every business sector, not least of all financial services. Increasing customer expectation has seen the emergence of new technologies to meet the growing demand for greater control and flexibility in the way that people manage their finances. This shift has led financial institutions to transform traditional ways of working and invest in new solutions to remain competitive, deliver a frictionless customer experience, drive down costs and enable future business growth.

“Customers expect to be able to manage their finances whenever and wherever is most suitable for them and technology is the key to meeting and exceeding their expectations,” explains Chief Information Officer of Virgin Money, James McGlynn. An electronic engineer by background, McGlynn witnessed how the 2008 financial crash led to the subsequent acquisition and merger of financial institutions and the emergence of ‘challenger banks’, creating a seismic shift in the financial market. This disruption has also been supported by the development of new digital tools designed to make banking increasingly seamless, with new services devised specifically around the customer experience. 

“You could argue that in a future Open Banking market, three things will become increasingly important for banks. Firstly, what your brand stands for and the customer experience that underpins it,” notes McGlynn. “Then how you gather and protect data. And finally, delivering customer-centric propositions to make people's lives better, financially or otherwise. The banks who find the optimal balance of these three elements will prosper in the long term.”

Leading edge technology

Innovation is key; however, the real differentiator is how innovative technology is operationalised and implemented in a stable, secure way to operate at scale. Many exciting betas or prototypes exist but to truly bed-in a stable tech environment, takes skill and time.

“At Virgin Money our size and scale is a competitive advantage. We have operational maturity, whilst being relatively more agile than the larger incumbent. Our technology transformation plans are focused on exploiting this agility via the development of re-usable services and cloud technologies. Re-usable services allow us to break down complex systems into components which we can use to create different products and services quickly. You build something once and then you reuse it multiple times,” says McGlynn.

“This has given us a faster lead time to market and lowered operating costs. It also gives us an open, extensible model where we can bring in the benefits of open APIs and sharing services with our commercial partners to expand our customer propositions.

“We are also focused on the journey to transform physical computer systems and assets into Cloud services which enhances our capability to flex the scale in line with business growth while avoiding linear cost growth.”

Consumer confidence

To respond to the changing needs of customers and colleagues, Virgin Money needed a secure and highly reliable data infrastructure capable of running applications and services that would improve the user experience.

That’s why Virgin Money partnered with Vodafone. The telecoms giant worked closely with Virgin Money to first understand the company’s needs and growth strategy in order to deliver the right solutions.

“Vodafone has a strong pedigree in the finance sector, and our best ever network provides a future proofed data infrastructure that can scale to meet Virgin Money’s needs,” explains Mick Wayman, Head of Major Business at Vodafone UK.

“We spent lots of time understanding the Virgin Money business and aligning our capabilities to their needs. We also shared insights from our own experiences and our market knowledge to help Virgin Money in their own decision making.”

“The full portfolio of services we offer allows Virgin Money to consolidate the number of strategic suppliers they engage with and builds a cohesive future technology roadmap.”

“Our fixed and mobile services are underpinning business critical change programmes across the UK. Vodafone teams have worked closely with their Virgin Money counterparts to make sure services are delivered ahead of schedule. When challenges were encountered by either side throughout the roll outs, we worked quickly and collaboratively to find solutions that would ensure business outcomes were not placed at risk.”

By working with Vodafone to design a network solution that’s tailor-made for its needs, Virgin Money now has the secure, reliable data infrastructure it requires to provide customers with the best possible digital experience, both today and well into the future.    

Changing attitudes

The use of ‘big data’ analytics, open API’s and Cloud Services is set to grow across the financial sector. “The number of third party services that contribute to the end-to-end value chain between a bank and its customers can grow exponentially. This is a risk, but successful businesses will be the ones who understand how to take advantage of this ‘ecosystem’ without losing the ownership of their customer,” adds McGlynn.

Building mutually beneficial partnerships to create a resilient ecosystem has been essential for Virgin Money, and has furthered the business in standing apart from the competition.

“Many businesses treat IT services as commodities, which can be consumed in-line with contracted service level agreements. We have a different take on that and believe that everyone who provides services to our customers with us and for us, needs to understand our principles, our values, and ultimately love our customers as much as we do,” adds McGlynn.

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Strengthened Operational Performance

In a world of fast-changing technology it is imperative for the business to work closely with partners that have the scale, innovation capability and commercial strength to go the distance on the transformation journey. Partnering with Japanese tech giant Fujitsu, the company has brought a breadth of capabilities to the business. Most importantly, it has not only supported, but steered the development of its core banking platforms.

McGlynn adds: “Fujitsu supplies the engine that drives our core banking services. The platform is reliable – quite simply, it is always on - and its performance is of the highest quality. Six Sigma performance measures are just expected when dealing with millions of customer transactions.

“We have enjoyed a 30-year long relationship with Fujitsu, so we know that works but we have been impressed by the way that Fujitsu has embraced our EBO values and worked to further strengthen the partnership. Fujitsu treat us as a valued customer and work hard to understand what we are about, to build relationships and to bring us new ideas.

“Fujitsu don’t rest on their laurels. They're evolving their current service so that it can be more cloud-based and open. We put a lot of emphasis with them to make sure services are fast, secure and resilient. And that’s what they do, and they’re good at it.

“Relationships, and a sharing of values runs deep between the two companies. Virgin Money and Fujitsu are working towards shared apprenticeship schemes that help school leavers enter the workplace,” he continues.

“Fujitsu is using the Virgin Money Giving platform to support its in-house charitable work. And, in 2017, Fujitsu’s runners raised over £10,000 for the mental health charity, Heads Together, by running the Virgin Money London Marathon. A Fujitsu team will participate in the race again in 2018.

“These add-ons may not look business critical, but they are really important to us. It’s what differentiates Fujitsu from other suppliers – the team gets what we are really all about.”

Advanced technological world

Demand for staff to adopt a multi-skilled approach within the CIO function has led the business to invest in its workforce and offer a number of graduate schemes for those currently in education.

McGlynn notes: “We're getting a different type of candidate who has a new perspective on technology which complements our existing teams perfectly.

“To support our future plans we've got a very active STEM initiative with schools and colleges to get that groundswell of new talent and diversity into the technology market.

“Future technologies are exciting differentiators but it’s still a matter of balance between rolling out an innovative technology solution while being able to operate that safely, reliably and at scale. Beyond that, the key is to not to forget the customer journey and experience. As such, the development of our technology strategy is about creating extensive end-to-end solutions, where we can continue to deliver the flexibility our consumers need. Making sure that we are business-led, safe and focused on what customers truly need, is the key,” concludes McGlynn.